Relationship between HRM Practices and the Perception of Organizational Performance, Roles of Management Style, Social Capital, and Culture: Comparison between Manufacturing Firms in Cambodia and Taiwan

Abstract

The study to find out the effects of HRM practices on business performances (opera-tional performance and overall firm performance) is conducted in this research. Total sample sizes of 160 respondents were collected from supervisors and managers in manu-facturing firms in two countries, Cambodia (80 data) and Taiwan (80 data). The ques-tionnaire includes nine HRM practice factors, HR planning, staffing, incentives, appraisal, training, team work, employee participation, status differences, and employment security, to explore the relationships with the perception of firm performance (non-financial and financial performances). At the same time, the HRM practices are tested to observe im-pacts on four operational performance contents such as product quality, product cost, product delivery, and production flexibility, as well. There are three main objectives in this research. Firstly, this study is to confirm the HMR practices-organizational performance relationship, which has been popularly amassed by many authors of the field. The results of this study showed that HR planning, staffing, incentives, appraisal, training, team work, and employee participation positively influence employee productivity; Moreover, the similar HRM practice criteria: HR plan-ning, staffing, incentives, appraisal, training, team work, employee participation, and em-ployment security were found to have positive relationships with perceived financial per-formance (market share and sale growth) of manufacturing firms. In addition, HRM prac-tices-operational performance positive relationship was also confirmed in this study. Secondly, the study includes the observations of moderating roles of management style (decentralization), social capital (trust), and corporate culture (proactive culture) aligning with HRM practices to see the effects on organizational performances. The re-sults show that decentralization moderates HRM practices-employee productivity rela-tionship; trust moderates HRM practices-operational performance relationship and HRM practices-financial performance relationship; proactive culture moderates the relationship between HRM practices and financial performance. The last objective of this research is to explore the differences and similarities be-tween HRM practices of manufacturing firms in Cambodia and Taiwan. The t-test results present that status difference and employment security practices are different from the two countries. The perception of status differences in Cambodia’s manufacturing firms is lower than the perception of those in Taiwan. On the other hand, employees in Taiwan’s manufacturing firms perceive that they are provided more employment security than em-ployees in Cambodia’s firms. Moreover, the results of regressions analyses illustrate that employee participation is the common adoption found in the two countries’ current HRM practices, and employee participation itself is the most effective HRM factor that can be used to improve operational performance and overall firm performance.

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